Bailout

The Senate's inability to throw a lifeline to Detroit has compelled the Bush administration to step in with loans to the automakers to prevent an economic calamity. Nobody likes rewarding General Motors and Chrysler for failure. But the economy, which already has lost nearly two million jobs this year, can't withstand the body blow from the collapse of one or more of the Big Three. It could result in the loss of three million more jobs. In Pennsylvania, which has been hit hard by job losses and mortgage foreclosures, about 120,000 workers are tied to the auto industry.

Just in time for the holidays, here's the first installment in a maybe not-so-fanciful look at how the economic woes might affect North Pole Toys LLC. WASHINGTON - Santa Claus, Mrs. Claus and elf union leaders genuflected before Congress yesterday and begged for an emergency $18 billion bailout. Claus painted a bleak picture of his toy manufacturing and delivery company during an unprecedented - and sometimes volatile - three-hour session. "I'm not going to lie to you, folks," Claus said at the start of the hearing.

Sen. Arlen Specter yesterday called for Congress to avoid a "rush to judgment" in considering legislation to solve the country's financial problems. Specter (R., Pa.) said he shared the public's "skepticism about legislation which will let Wall Street off the hook and pay insufficient attention to Main Street, middle class Americans. " In a letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, Specter wrote that he was concerned that Congress was rushing to complete a $700 billion-plus bailout package before adjourning this Friday.

The frustrating part about auto executives' presumptuous attitude toward a taxpayer bailout is that they are probably right - they are too big to fail. But the chiefs of General Motors, Chrysler and Ford didn't help their cause by arriving in Washington in private jets to ask Congress for a handout. The move typified the industry's cluelessness. Lawmakers didn't promise to rescue Detroit, but they didn't rule out a bailout, either. Congressional leaders said they might return to Washington on Dec. 8 to consider $25 billion in emergency aid, provided the automakers come up with a workable plan to become competitive.

A new Federal Communications Commission report that criticizes the idea of a federal bailout of failing media companies makes sense to journalists who fear such an effort might cost more than it's worth. The objectivity that the public wants from news agencies would be threatened if the bailout led to a cozy relationship between government and the Fourth Estate. Of course, conservatives fear public funding would free media no longer in need of as much advertising revenue to be more liberal.

Everyone, it seems, is looking for a bailout. Many leading financial firms have already received billions from the federal government, and some are already back for a second helping. Likewise, many states and cities are counting on stimulus funds from the feds to help balance their budgets. So let's remember that with any and all of the recommendations for the latest $825 billion stimulus package - whether it's the increased spending favored by Democrats or the tax cuts preferred by Republicans - the money is all borrowed and will have to be paid back by taxpayers.

The unprecedented taxpayer bailout of Wall Street and the banking industry is as necessary as it is infuriating. Spawned by greed and reckless lending, the worst financial crisis in decades has left policymakers without any good options for fixing the mess. The Bush administration's rescue plan, to be presented to Congress in the next few days, will put taxpayers on the hook for hundreds of billions of dollars. Your grandkids will be paying that bill because Wall Street titans were more interested in seven- and eight-figure bonuses than in sound investment practices.

There will be no state bailout for financially sinking Allegheny Health, Education and Research Foundation, but Gov. Ridge and Mayor Rendell are speeding up $11 million in state and city payments to keep the foundering health system afloat. The accelerated money - $9 million in state welfare and education dollars, $2 million in city mental health money - is being fast-tracked for payment to system hospitals next week, about a week earlier than due. The effort, said Rendell, "might buy some time" to avoid system-wide failure and the loss of thousands of Philadelphia jobs.

Mayor Street just gave PGW a pardon worth $90 million, and pushed back the repayment of a loan worth $45 million to the year 2008. While it'll be a pleasure to know that Street will be leaving office in 2008, it still puts a huge hole in his budget while virtually wiping out what little was left of that huge surplus the city had not too long ago. It's illogical to think that the preservation of the value of a grotesquely mismanaged public...

President Bush's bailout of General Motors and Chrysler prevents an economic calamity, for now, and dumps the responsibility on his successor to enforce the vague terms. In agreeing to lend the automakers $17.4 billion, Bush really had no options. GM and Chrysler would have run out of money by the end of the month, a failure that could have resulted in the loss of up to three million middle-class jobs next year. On top of the two million jobs lost this year, such a blow would have deepened a recession that is already the worst in a quarter-century.

ATHENS, Greece — European leaders insist that they want to keep Greece in the eurozone but are putting off any agreement on how to accomplish that. Greece says that it, too, wants to stay in the eurozone, but whether it can implement the austerity Europe has required will be uncertain until after its elections. Essentially, both are playing for time — about a month. The question is whether financial markets will wait or force their hand. Concerns that European leaders lack the political will and wherewithal to tackle the continent's economic problems have worried markets for weeks.

ATHENS, Greece - Critical last-ditch talks to form a coalition government in crisis-struck Greece foundered once more Sunday, leading the country one step closer to new elections, although the socialist party leader said he retained "existing but limited' optimism for a deal. The political uncertainty has alarmed international creditors who have given Greece billions of euros in bailout loans over the last two years, and has thrown the country's continued presence in the European Union's joint currency into serious doubt.

The state has proposed to keep Chester Upland schools open until June by releasing $27.7 million to pay expenses but says district management is so dysfunctional that the money should be disbursed directly to creditors. Also on Tuesday, the Department of Education asked a state judge to appoint a receiver for the district who would assume the powers of the school board and administration. A Commonwealth Court filing cited the proposed spending plan's findings that the school district's finances are "in complete disarray.

The government bailout of the U.S. auto industry was a success. Without financial help from Uncle Sam, General Motors and Chrysler likely would not exist today. The American auto industry would be a shadow of its former self. And the U.S. economic recovery would be even more drawn out and frustrating than it has been. Saving the automakers was distasteful, but necessary. Rehashing this bit of history is timely on the eve of the Republican primary in Michigan, where the economy has long been tethered to the auto industry.

It is not often that a Greek man discusses politics and a listener must strain to hear; high decibels and hand gestures are standard Greek rhetorical tools. And yet, during a chat with Georgios Kordis the other day, a hearing aid would have been helpful. Even a buzz saw did not alter Kordis' Zen-like whisper inside a new Greek Orthodox church in Montgomery County, as he discussed this week's German-led 130 billion-euro ($172 billion) bailout to keep Greece from defaulting on its loans.

NEW YORK - A day after Dow 13,000, investors took a break. Stocks closed lower Wednesday for the first time in four trading days. The Dow Jones industrial average lost 27.02 points to finish at 12,938.67. The day before, it briefly passed 13,000 for the first time since May 2008. Some investors worried about the details of a bailout deal reached for Greece this week. But analysts said investors were mostly in a holding pattern after seeing the market hit an important psychological mark.

BRUSSELS - After more than 12 hours of talks, the countries that use the euro reached an agreement early Tuesday to hand Greece $170 billion in extra bailout loans to save it from a potentially disastrous default next month, a European Union diplomat said. The euro surged as the news broke, climbing 0.7 percent to $1.328 within minutes. Though much depended on the details of the deal, a final agreement on the bailout for Greece would take some pressure off the 17-country currency union, which has been battling a debt crisis for two years.

BRUSSELS, Belgium - Prime Minister Lucas Papademos traveled to Brussels, Belgium, on Sunday, a day before eurozone finance ministers must decide whether Greece will get a $170 billion bailout and avoid a potentially devastating default. Leaders from Germany, Italy, and Greece have said they are optimistic that the deal on a second massive bailout for Athens can be clinched at the meeting after months of delay, but critics have expressed doubts about Greek political leaders' commitment to austerity.

BRUSSELS - Greece's hopes to finally get its bailout and dodge default next month were boosted Friday, when key European leaders, including German Chancellor Angela Merkel, sounded confident a deal could be reached. The leaders of Germany, Italy, and Greece are "optimistic" the $170 billion rescue package can be cleared next week, a spokesman for Merkel said Friday after the three held a conference call. Hours earlier, the French prime minister warned against letting Greece default.